What if customer barely overdue the payment?
Well, certainly someone screws something badly. Basing on our experience there are the following strategies with different types of our customers:
Strategic customers, they work with us for more than a year in a happy synergy.
Everything can happen. In our case, it was a glitch on the postal service, so the letter with a check was wondering in the wilds for almost 2 months before it returned back to them. We’ve together learned lessons of this case, now they are using ACH - everything works smoothly.
- There is no need to start a mess with a strategic customer, just because one payment got delayed, moreover, it wasn’t their fault.
- Learn the lessons, make necessary changes and keep moving in synergy further.
- Long-term relationships are impossible with a nervous background. Business Process Outsourcing (BPO) requires patience, understanding, and synergy.
All payments since specific date were delayed. The last invoice overdue far away.
Allegedly, this customer has a sort of financial issues, financial creep and according to our experience, it’s better to have a call with him and together decide to freeze the software project until financial flows on his side will be fixed. For instance, one of our customers got his accounts frozen in the bank, which started the business dissolving process. He had far bigger problems because all his savings were frozen there. Sad, isn’t it? Well, it happens even to best of us.
We’ve continued his mobile application development project in 2 months. No more delays, he is one of our best strategic customers already.
- Even the best customers can eventually experience problems.
- Chat with them. Define a mutually beneficial way.
- It’s never late to start building synergy. Business Process Outsourcing (BPO) should issue as less “alienation” problems as possible
Customer rejects to pay for a specific delivery.
Well, that’s definitely a good lesson to learn. First, check with the customer “what’s wrong?” There were cases when our accounting made a mistake, or a customer had a wrong vision. A couple of times it was a misunderstanding between our development team and customer.
But a couple of times it was weird. You know these strangely demanded customers, which are inventing new requirements during the call with them.
Secondly, keep calm, be a bastion of calmness. Emotions will just screw things rather than solve them. Make sure, that your team completed everything according to the executed agreement and inform this customer that if the invoice won’t be paid by the end of the month, the late payment penalty 1.5% a month will be applied to it since 31st day. Discuss with a business owner this issue, perhaps, it’s not a bad idea to freeze the development of this project. Finally, inform the customer, that your company doesn’t like this, but now it owns a certain percent of his software project IP.
That’s a scourge of all software development Business Process Outsources. More you are in this business, more IP rights left in your pocket by those who won’t pay for a specific (in many cases final) delivery. That’s not bad news, nor good - that’s a fact. In case the idea is good - you can become a new technological startup. Conclusions:
- Rejected delivery is a scourge of all Software Development Business Process Outsources
- Check what’s wrong? Sometimes the problem was issued by your colleagues. Fix it!
- If you did everything according to the executed agreement - make a margin call with a customer, explain him everything, remove any sign of misunderstanding or miscommunication
- Finally, if you did everything right, but there is no payment, yet. Check with your business owner/escalation point - if you can press on penalty charges/development freeze.
- Collect the IP. Perhaps, it can be a diamond. Moreover, normally such cases are happening, when your customer loses a fate in his product and just want to limit his financial loses by dodging your invoices and calls.
To be continued